Challenging the costs of dealing with an estate

If someone leaves a Will, they usually name people to deal with the estate when they die; such people are called 'executors'. The people or organisations entitled to receive the assets of someone who has died are called 'beneficiaries'. In terms of dealing with the estate, the executors have the authority to take decisions and although they owe duties to the beneficiaries, generally, the beneficiaries are not entitled to have any hands-on involvement in the administration of the estate.

It is this fact that makes a recent High Court decision interesting. The executor of a lady who died appointed a firm of solicitors to assist them in dealing with the administration of the estate. The executor was not a beneficiary. In this case, the beneficiaries were the deceased's son and daughter.

The solicitor's original estimate for the legal fees to deal with the estate were between £10,000 and £15,000 plus VAT and expenses. At the end of the day, their total charges were over £54,000 plus VAT. The deceased's son claimed that the estate was a straightforward one to administer and that the solicitor's costs were therefore 'grossly excessive'. The deceased's son brought the legal claim against the firm of solicitors appointed by the executor. Interestingly, the executor had accepted the law firm's costs and had no involvement in the legal proceedings.

The court was prepared to accept the view that where there is a substantial discrepancy between an estimate provided to a client by a solicitor and the final costs billed, that discrepancy generally calls for an explanation. Interestingly, the judge noted how quickly after the file was opened the original fees estimate was exceeded. The court found that the solicitor's firm could not justify the discrepancy between the original estimate and the final bill. On this basis, the court was prepared to allow the challenge to the solicitor's costs by the beneficiary.

What is interesting about the case is that, of course, the beneficiaries were at no point clients of the law firm. The court rejected the argument that only the executor was in a position to challenge the bill.

The case is an interesting reminder that in the area of Wills and probate, the courts are willing to impose a duty on solicitors' firms to take account of the interests of beneficiaries who are not clients of the firm. Executors may wish to ensure that they take timely, specialist advice when acting on the administration of an estate. Conversely, beneficiaries should always look at the fees charged by professionals and take appropriate advice if anything appears to be unusual.

To discuss this or any other private client matter, contact us.